Data Shop: Gauging Confidence in the U.S. Housing Market

Terry Loebs
Pulsenomics LLC

Data Shop
Data Shop, a department of Cityscape, presents short articles or notes on the uses of data in housing and urban research. Through this department, the Office of Policy Development and Research introduces readers to new and overlooked data sources and to improved techniques in using well-known data. The emphasis is on sources and methods that analysts can use in their own work. Researchers often run into knotty data problems involving data interpretation or manipulation that must be solved before a project can proceed, but they seldom get to focus in detail on the solutions to such problems. If you have an idea for an applied, data-centric note of no more than 3,000 words, please send a one-paragraph abstract to david.a.vandenbroucke@hud.gov for consideration.

Confidence in U.S. housing markets is a prerequisite for stable real estate asset values and a healthy economy. Bold policy actions in recent years by the Obama Administration and the Federal Reserve Board have underscored the profound impact that housing market health can have on consumer sentiment and the macroeconomy, and these actions imply that traditional, lagging indicators of housing market conditions (for example, home price indices, real estate transaction volumes) are incomplete gauges of market risk. Like those of other asset classes, future levels of transaction volume and prices in residential real estate markets depend on the prevailing sentiments and expectations of market stakeholders.